A panel of seven private Japanese economists tentatively declared the economy ended its second-longest boom and entered "recession" in late 2018, suggesting it was struggling long before its more recent coronavirus slump.
While recession is technically defined as two straight quarters of economic contraction, in Japan, the government uses the term to refer to the end of boom-and-bust cycles, which is determined by a Cabinet Office panel of economists.
The panel said on Thursday Japan's most recent growth cycle started in December 2012, when Prime Minister Shinzo Abe swept to power with a pledge to reboot the economy with aggressive monetary and fiscal stimulus.
"We agreed it was appropriate to set October 2018 as the tentative peak of the economy, which was shown by historical diffusion indexes," Hiroshi Yoshikawa, Rissho University professor who chairs the panel, told reporters after its meeting.
That likely October 2018 peak snapped the growth cycle at 71 consecutive months - when an intensifying Sino-U.S. trade war damaged Japan's exports and factory output. That will likely trigger calls for virus stimulus on top of $2.2 trillion implemented, some analysts say.
"The economy likely hit the bottom in May providing that the second wave of infections remains limited," said Toru Suehiro, senior market economist at Mizuho Securities.
"However, given the uncertain outlook, the jobs-to-applicants ratio may stay stagnant, which could delay the timing of bottoming out."
Technically, Japan dipped into recession once during that 71-month expansion, in the second half of 2015.
It more recently slid into another technical recession in the six months to March 2020, which is expected to have deepened in the June quarter as the coronavirus devastated demand.
Economists and policymakers see the economy emerging from its worst postwar downturn and getting back on track for a modest recovery.
The panel's latest view means the growth cycle fuelled by Abe's "Abenomics" policies stopped a little short of a record post-war expansion phase that lasted for 73 months through February 2008.
The U.S. economy ended its longest expansion in history in February and entered recession due to the pandemic, a private sector research group said last month.